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Low-volatility ETFs have become a popular choice with nervous investors who want stock market exposure with fewer ups and downs. However, these conservative funds may lag in a prolonged rally.

“In a sustained bull market — if you want to be invested in stocks at all — you would be much better off in a broad-based, all-in index fund than a low-volatility ETF,” wrote John Wasik at Reuters in a report this week.

“To be sure, as risk-reduction vehicles, low-volatility ETFs play it safer by investing in mature companies with steady cash flows and solid dividends. They are less likely to be sold off in a market rout such as the one experienced last year,” he added. [Low-Volatility ETFs: Wait For Full Market Cycle?]